I heart competition
I was having lunch with my friend Chris last week, and we started talking about competition. It’s a topic I have spent a lot of time thinking about at all the companies that I have worked at.
From a strategic perspective, it makes sense to figure out what the right competitive set is, and how you differentiate from that set. I recommend spending time thinking through who or what the competition might end up being in the future as well, and figuring out how you are going to deal with that. Its that type of thinking that inspired Google to buy Youtube and its why I am sure they are giving lots of thought about what to do about twitter.
But competition doesn’t have to always be a threatening thing. In fact early on in a company’s life, competition can be a great thing. If other people are trying to do the same thing that you are, that can establish your idea as a category. And categories are great, because it makes observers pay attention. Journalists and bloggers want to write about new categories, investors step up their due diligence resources. The amount of attention that Netflix spurned dramatically increased when blockbuster decided to launch a by-post service, and I think a lack of competition may explain why twitter is still not garnering the mainstream attention that the concept deserves.
Perversely, you may even benefit from a competitor performing well in the short-term, to further focus the wandering gaze of the media. But the counterintuitive nature of this observation does not rock the fundamentals of competitive theory – you still have to know your competition intimately, and communicate what it is that makes you different.
